Despite tough corporate broking markets – especially against the backdrop of current eurozone uncertainty – investors shouldn't be too concerned at the slide in reported earnings at broker WH Ireland. That's mainly down to a £2.3m hike in administrative costs during the year as the group beefed-up both its wealth management and corporate broking units. Moreover, with a rock solid balance sheet, the shares look cheap.
Management has actually been tackling the weak conditions by expanding its corporate broking capacity. That involved hiring 10 financiers and analysts, at an extra cost of around a £1m a year – but that has helped the division to win 13 new corporate clients, taking the total to 69, with a capacity to handle 100. The asset management side received a boost with the February's acquisition of the client base and non-cash client assets of Pritchard Stockbrokers. That expansion appears to be bearing fruit and assets under management rose 14.1 per cent in the half to £1.55bn while the regional office network grew to 19 sites. True, the costs of integrating clients and staff did outweigh commissions, but this should reverse in the second quarter.
WH IRELAND (WHI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 69p | MARKET VALUE: | £16.1m | |
| TOUCH: | 67-71p | 12-MONTH HIGH: | 105p | LOW: 49p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 54p | NET CASH: | £3.25m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 11.4 | 0.71 | 2.35 | nil |
| 2012 | 12.6 | 0.19 | 0.81 | nil |
| % change | +11 | -73 | -66 | - |
Ex-div:- Payment:- | ||||
